N.Y.'s Serio: ? Road Map' A Good Beginning
By Jim Connolly
NU Online News Service, Aug. 30, 3:25 p.m. EDT?An influential insurance regulator reacting to Congress' draft of a "regulatory road map" for the insurance industry said he sees some areas for reservations, but it is a good start for modernizing the industry.[@@]
New York Insurance Superintendent Greg Serio, commenting on the draft released two weeks ago, said, "It shows that they (federal lawmakers) have been listening to what we (state insurance commissioners) have to say."
The discussion draft, titled "State Modernization and Regulatory Transparency Act," was released by Rep. Richard Baker, R-La., chairman of the Capital Markets Subcommittee of the U.S. House Financial Services Committee. Rep. Baker and Rep. Michael Oxley, R-Ohio, the Committee chair, have been working to implement modernization of insurance regulation.
Mr. Serio is one of a number National Association of Insurance Commission members who have been working with Congress as it seeks to create federal tools to help modernize state insurance regulation. That dialogue has been ongoing and the draft is "a reflection of the series of discussions that have already taken place," said Mr. Serio.
The draft still has to be vetted with NAIC membership, but does include many of the initiatives that the NAIC is working on, he said. Mr. Serio added that he does not know where the NAIC membership will ultimately go with supporting the current measure.
He said the road map included NAIC input on items such as speed-to-market initiatives. However, he said, there are still concerns over the notion of a federal entity regulating insurance. And there are differences over how rates should be regulated, he added.
A reference to the McCarran-Ferguson Act remaining a basis for insurance regulation, Mr. Serio said, reflects what Reps. Baker and Oxley have said all along: that the federal government is not seeking to replace state insurance regulation.
Mr. Serio also pointed to contributions from state regulators on the issue of financial surveillance that has been incorporated into the discussion draft.
The financial surveillance framework noted in the discussion draft includes: periodic meetings between regulators and company management to review issues ranging from business strategies to financial solvency, insurer self-audits, and adoption of the NAIC Accounting Practices and Procedures Manual.
The discussion draft also calls for antifraud measures including greater communication and coordination between state and federal regulators.
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